Australia: Are all high income employees prevented from making unfair dismissal claims?

An employee is earning well in excess of $100,000 per year. If
their employment is terminated, surely they can't bring a
statutory unfair dismissal claim?

As the Fair Work Commission decision in Kaufman
examined below demonstrates, this is not always case.

The Facts

The worker filed an application with the Fair Work Commission
alleging that the termination of his employment was unfair. The
employer raised two jurisdictional objections, one of which was
that the worker was not a person protected from unfair dismissal
under the Fair Work Act.

The issue became whether the worker was engaged under the
Real Estate Industry Award 2010 (Award), which it was
asserted, would allow the worker to bring such a claim despite the
level of his earnings. The worker's rate of annual earnings at
the time of his dismissal was well above the "high income
threshold" (currently $138,900 per annum). This would mean
ordinarily that the worker would have no entitlement to bring the
application, unless his employment fell under the Award.

The worker claimed that the classifications of "property
sales representative" and "property sales
supervisor" under the Award were relevant to his employment.
There was no dispute that the worker was engaged in the real estate
industry.

In response, the employer argued that the role in which the
worker was engaged at the time of his dismissal, referred to as
Regional Director, was a senior management position that went
"well beyond the classifications in the
Award".

The Findings

Unfortunately for the employer, the Commission did not accept
that the worker's role was one of senior management.

Evidence was given that the worker's day-to-day duties
included meeting revenue targets, which required the worker to sell
property.

Deputy President Gostencnik noted in relation to evidence given
by one witness with respect to the worker's duties:

"(the) evidence on this point sounds much like the
(worker) was required to use his personal initiative and source
prospective sellers and buyers of real property or businesses, a
task indicative of a Property Sales Representative under the
Award."

The Deputy President went on to find:

"In my view, the evidence discloses that the
(worker) was a high performing employee principally responsible
for attracting and executing high-value real estate transactions.
He had no managerial responsibilities and no direct
reports."

The application was relocated to the Commission's Unfair
Dismissal Case Management Team to be dealt with. The other
jurisdictional issue raised by the employer (that the dismissal
arose as a result of a genuine redundancy), would be considered in
conjunction with the merits of the case.

Conclusion

While this decision turned on its own facts, its serves to
demonstrate that just because a worker is a high-income employee
does not necessarily prevent them from bringing an unfair dismissal
claim. In this case, the key to the worker's success was the
fact that they could demonstrate that their duties brought them
within a relevant Award classification. Had the worker's duties
been primarily managerial, and took him outside of the relevant
Award classification, matters would have been different.

Employers should be mindful of whether an employee who is to be
dismissed falls under a modern award, regardless of their level of
income.

Further, merely giving an employee a managerial job title will
not be sufficient to remove them from an award if the reality is
different.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Valenzuela decision highlights that employers must seriously consider any potential dismissal based on serious misconduct.

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